Correlation Between McEwen Mining and Micron Technology
Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Micron Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining McEwen Mining and Micron Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Micron Technology, you can compare the effects of market volatilities on McEwen Mining and Micron Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in McEwen Mining with a short position of Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Micron Technology.
Diversification Opportunities for McEwen Mining and Micron Technology
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between McEwen and Micron is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology and McEwen Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on McEwen Mining are associated (or correlated) with Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of McEwen Mining i.e., McEwen Mining and Micron Technology go up and down completely randomly.
Pair Corralation between McEwen Mining and Micron Technology
If you would invest 213,337 in Micron Technology on August 28, 2024 and sell it today you would lose (145.00) from holding Micron Technology or give up 0.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
McEwen Mining vs. Micron Technology
Performance |
| Timeline |
| McEwen Mining |
| Micron Technology |
McEwen Mining and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Micron Technology
The main advantage of trading using opposite McEwen Mining and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Micron Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Micron Technology will offset losses from the drop in Micron Technology's long position.The idea behind McEwen Mining and Micron Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Micron Technology vs. The Bank of | Micron Technology vs. Burlington Stores | Micron Technology vs. Grupo Carso SAB | Micron Technology vs. United States Steel |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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